As market heats up, homes sell before they're listed

In Venice, several Island Court town houses were reserved before officially hitting the market.

By DALE WHITE

In another sign of the real estate comeback, one of the largest redevelopment projects in recent years on Venice island was attracting buyers even before it officially went on the market.

The 26 town houses in the Island Court development are to be built on the site of a former nursing home at 437 Nokomis Ave., across from Venice Regional Hospital.

Even before the town houses went on the Realtors' Multiple Listing Service on Thursday, buyers reserved five of the two-story condos — which have starting prices at $369,900.

“That's a great sign that we've got it priced right,” said David Gruber, a partner with Robert Martin in Nokomis Ventures, the company that intends to build Island Court.

Almost all of Venice island is built out, meaning most of the construction involves redevelopment. Such projects were flourishing during the real estate boom, slowed to a trickle during the Great Recession, and appear to be taking off again.

But the Island Court project also reflects a new reality in the downturn's wake. The homes are being priced for less and are smaller than what was envisioned for the land by a previous developer during the real estate boom.

Whittling down

Existing home sales also are picking up: According to Trendgraphix, a firm that compiles data based on the Venice Multiple Listing Service, residential property sales in the area increased 22 percent last year compared with 2011 — with 2,564 sales compared with 2,107.

“The bottom line is that buyers have whittled down the once-bloated inventory of available properties to such an extent that there is now an insufficient supply of pre-existing homes to keep up with demand,” said Tom Heatherman, corporate communications director for Michael Saunders & Co. — the real estate firm marketing Island Court. “That is why prices have risen in the last year by nearly 12 percent.”

A balanced real estate market has a six- to seven-month supply of homes. At the current pace of sales in the Venice area, the supply could be exhausted in 3.8 months, said Diane Fuchs, president of the Venice Area Board of Realtors.

That is expected to lead to more new residential developments, of which Fuchs counts about 10 subdivisions in progress in the Venice area — plus opportunities for urban infill, such as Island Court.

This week, the Venice City Council approved a five-lot subdivision for 1.73 vacant acres on the north end of the island, 800 Higel Drive.

At least five homes on the island have been demolished and replaced with larger residences in the past year, city planner Roger Clark said.

Clark expects plans to be filed soon for a four-condo complex on a vacant lot in the 700 block of West Venice Avenue.

Island Court is on the site of a nursing home demolished about eight years ago, Gruber said.

Before the recession, developers intended to build a multi-family project on the site with 3,600-square-foot units priced at about $1 million.

That project never got off the ground.

After Nokomis Ventures acquired the property from a bank, the new owners decided smaller, less expensive condos would be more marketable.

Its 1,813-square-foot homes will include two bedrooms, two and a half bathrooms, a two-car garage, an elevator, a courtyard and balconies.

A condo that size, at that price, “is hitting a niche that isn't being filled at the moment,” said Nancy Arbuckle, project director for Michael Saunders.

Aside from the smaller units and lower prices, Island Court's potential appeal is its location, Gruber and Arbuckle said.

The 79,800-square-foot property is an easy walk from Venice Regional Medical Center, doctors' offices, shopping and Venice's library, art center and community center.

Heatherman said Island Court signals a rebound not just in the overall residential market, but also in the condominium market.

“Condominium inventories have been especially challenged as new construction essentially ground to a halt during the economic downturn,” Heatherman said. “Now that demand is healthy again, efforts are well underway by developers in every price range to expedite the delivery of new multi-family housing, as the Island Court project amply demonstrates.”

Fuchs expects prices to continue to rise, but she hopes those increases are at “a steady pace” to avoid the rapid escalation that caused the market to collapse several years ago.